The Mediating Role of Employee Commitment and the Moderating Effect of Bank Size in the Relationship between Leadership Quality and Innovation Performance in Selected Private Banks in Addis Ababa

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Leadership theories and extant literature suggest leadership quality has a significant influence on innovation performance. However, this relationship is not consistent owing to various reasons such as the role of interaction variables and contextual factors. The study followed a quantitative approach, explanatory research design, survey method, and questionnaire as data collection instrument. The study employed factor analysis (both EFA and CFA) through principal component analysis and structural equation model (SEM) to validate the study result. The study examined the mediating role of employee commitment and the moderating effect of bank size in the relationship between leadership quality and innovation performance. The Ethiopian private banking industry established the study setting. Probability sampling method and proportional random sampling technique were used to collect primary data. 205 questionnaires were distributed of which 187 were collected and found to be useful for analysis, accounting for more than 91.2 percent of the distributed questionnaire. Results indicated a partial complementary meditation role of employee commitment in the relationship between leadership quality and innovation performance. Results signpost bank size moderates the relationship between the input and outcome variables. The research finding showed that innovation performance is impacted by leadership quality of private banks and this relationship is mediated by the presence of committed employees and moderated by financial performance and asset, size of private banks, in Ethiopia.



leadership quality, innovation performance, employee commitment and bank size